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Energy can be managed and measured

Published on October 06, 2009

Sarah Van Der Paelt, CGA
Director, Commercial/Industrial Sales & Marketing
Union Gas Limited

Part one of a four part series

In the past, it was common to treat utility costs as a fixed cost. However, many businesses are now learning that you can manage utility costs with minimal upfront capital, which is great news in a challenging economy.

The benefits of managing energy and water use are obvious. The current economic downturn has increased the premium on cutting costs.  Managing energy and water use is one of the effective ways to keep these costs in line and build a competitive edge. Energy conservation also translates into meeting environmental goals - whether it is for ISO certification, regulatory compliance, or preparation for future cap and trade rules.

What many managers struggle with is how to put resource management in practice. Union Gas has been working with industrial, commercial and institutional clients to help them become more energy efficient. What we’ve found through this experience is that the best place to start is with understanding your utility bills.

Auditing utility bills is a simple process that makes use of information that is readily available. We recommend that our customers review their bills over the past two years - not just their natural gas but also electricity, and water. Look for extra charges applied due to late payment, minimum annual use, or other penalties and implement steps to ensure that these costs are avoided in the future. Have someone with practical knowledge of your facility make sure that the bills you are paying are actually yours and that they accurately reflect the amount you have used.  This often falls by the wayside when bills are sent to third parties for processing away from the plant. Keep reviewing your bills this way month by month going forward.

Next, start paying attention to patterns. Using a simple spreadsheet, you can start tracking what factors drive your utility use by asking simple questions:

  • “What was happening at this time to explain an increase or decrease?”
  • “Why are my bills always higher at one of my facilities compared with another similar one?”

A leaky valve might be behind a jump in water use, for example. New, more efficient equipment might explain a drop in natural gas consumption. Different operating and maintenance practices could be behind higher or lower electricity charges.

Once you have an idea of your utility costs and how you are being charged, you can look for ways to reduce consumption. At this point, companies tend to put together an energy team to begin actively managing utilities as a cost. This team should represent the major divisions in your business and, most importantly, include both the financial and facilities experience. Once in place, the team can look at ways to reduce waste and costs across the board. Your team can take a leadership role, in identifying and prioritizing opportunities, creating awareness of waste and driving change. They can ensure that senior management has the information to back up conservation actions with the highest level of corporate support.

Energy management is never a one-shot exercise. You want to make sure that managing energy use becomes an ongoing part of how you manage your business, subject to the same continuous improvement and active waste reduction efforts as any other business input. Ultimately you want to involve your whole workforce in the search for savings. To do this you need to build a conservation culture. Your energy team can play a key role in engaging the larger work force and leading this culture shift. Executive support will ensure that it takes root.

As we see more “green shoots” in the North American and world economies, firms that have found a way to manage their utility costs and ensure continuous conservation are going to be in a better position to take advantage of an economic upturn.

The great thing about tracking utility costs, identifying patterns, setting up an energy team and building a conservation culture is that they are all low or no cost solutions.  And the savings generated can be used to finance more costly efficiency upgrades. Why not turn the current economic crisis into an opportunity to make strategic energy management an integral part of your business? The next three articles in this series will provide more information on data collection, how to apply monitoring & targeting to drive down costs, and what Union Gas EnerSmart Programs have to offer.

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